Supreme Court rules employment tribunal fees unlawful

The government was forced to re-evaluate its justice policy last week after a humiliating unanimous defeat in court. The Justice Department has now announced the abolition of employment tribunal fees after the Supreme Court ruled them unlawful, and will be forced to repay a figure estimated at around £32 million.

The ruling came as a surprise to many. Few lawyers had any reasonable expectation that the 7 justices would overturn judgements by both the High Court in 2013 and the Court of Appeal in 2015. However, the justices unanimously backed an appeal by trade union Unison which argued that the fees were introduced unlawfully.

The original tribunal fees started at around £160

Tribunal fees were introduced in July 2013 by a fees order made by then lord chancellor, Chris Grayling. The original fees started at around £160, but then increased to between £230 and £950 for further hearings. Unfortunately, in certain cases claimants were forced to pay up to £1,200 to pursue their claims.

The reaction to the surprise judgement has been interesting. Law Society president, Joe Egan, said:

‘These fees placed an insurmountable barrier in the way of tens of thousands of people. Access to justice is a fundamental right – if you can’t enforce your rights then it renders them meaningless. Today’s decision will serve as an urgently needed wake-up call – justice must never be a luxury for those who can afford it, it is a right we all share.’

Gillian Guy, chief executive of Citizens Advice, claimed the ruling should finally put an end to tribunal fees standing in the way of people upholding their employment rights:

Claire Dawson, head of employment at national firm Slater and Gordon, told the Law Society Gazette:

‘This is a great outcome for employees and workers who have in recent years been discouraged from pursuing potentially viable claims because of the fees payable.’

The reaction from the government was, understandably, more muted. In a statement following the judgment, justice minister Dominic Raab said:

‘In setting employment tribunal fees, the government has to consider access to justice, the costs of litigation, and how we fund the tribunals.’

‘The Supreme Court recognised the important role fees can play, but ruled that we have not struck the right balance in this case. We will take immediate steps to stop charging fees in employment tribunals and put in place arrangements to refund those who have paid. We will also further consider the detail of the judgment,’ he added. The refund is expected to cost around £32 million.

So, what happens next? How will the government try to salvage the situation yet ‘strike the right balance’? Well, experts believe the government will try to move quickly to introduce alternative tribunal legislation. Beverley Sunderland, managing director, Crossland Employment Solicitors, believes that the government’s next move will be to try and introduce legislation to properly impose fees:

‘[However], as they do not have a majority, and given the clear and unequivocal statistics of the impact of fees on the numbers of claims brought, it is difficult to see how any such legislation will get through parliament as no MP, whatever their politics, is likely to vote for it,’ she added.

Her opinion received the backing of Diane Gilhooley, head of the global HR group at Eversheds Sutherland, who told the Gazette she believed the government would probably try to move quickly to put in place a ’more proportionate replacement fees scheme’:

‘As for those who have already paid tribunal fees, the MoJ has undertaken to reimburse fees already paid. What is not yet clear, however, is whether that undertaking extends to compensating employers who have been ordered by tribunals to reimburse fees paid by claimants,’ she added.